Webster waits for his replacement

Audit board sets agenda for next two months

By

MattAndrejczak

WASHINGTON (CBS.MW) -- William Webster said Wednesday he plans to serve as chairman of the new accounting oversight board until his replacement or an interim head is named.

Webster, who resigned the chairmanship Tuesday less than two weeks after he was named amid controversy over his role as director of U.S. Technologies, said he thinks an interim chairman will be named by the audit board's first formal meeting in early January.

The Securities and Exchange Commission is charged with naming Webster's replacement. Webster, a former judge who also headed the CIA and FBI, was picked to be chairman in a 3 to 2 vote split along party lines.

Webster said he assumes SEC Chairman Harvey Pitt, who resigned last week and backed Webster for the job, will name an interim chairman.

"That's entirely up to him," Webster said at a press conference following the board's initial planning session. "As far as I'm concerned, I'm at the service of the board in any way I can be useful."

When he announced his resignation, Webster said he was stepping down to help lift the "perfect storm" that has engulfed the board since its members were named Oct. 25.

The board is waiting to hear from the SEC if members can name their own interim chairman from one of the four other board members, he added.

Known as the Public Company Accounting Oversight Board, the other members include Kayla Gillan, former general counsel at California Public Employees' Retirement System; Daniel Goelzer, former general counsel at the SEC; Willis D. Gradison, former Ohio congressman; and Charles Niemeier, chief accountant in the SEC's enforcement division.

On Wednesday, the five board members got acquainted at a Washington law firm to outline their agenda for the next two months. The meeting lasted about seven hours.

Also attending the meeting were senior officials from the SEC and the National Association of Securities Dealers, the regulatory arm of Nasdaq.

The startup board, which is charged with policing the audits of publicly traded companies, is working under a tight statutory deadline of April 26 to hire staff, set salaries, secure office space and register accounting firms.

It is seeking to retain an executive search consultant to select key executive staff such as a general counsel and chief of staff.

The oversight board is expected to have an initial staff of 50 people and a budget of around $25 million. The board, which hasn't set its own salaries, hopes to hear from Congress within the next two weeks about what its initial budget will be. Once established, the board will fund itself through fees charged to public companies.

Among the other administrative tasks the board first plans to tackle are:

Incorporating as a not-for-profit D.C. corporation.

Drafting its organization bylaws and ethical standards.

Developing a first-year budget and milestones that will include the review of auditing and independent standards.

Establishing an organization chart.

The oversight board is the centerpiece of the Sarbanes-Oxley Act, which was enacted to restore investor confidence after the spate of corporate scandals the past year.

Congress gave the board wide powers to investigate and punish accounting firms that audit public companies. It is charged with conducting annual reviews of accounting firms that audit more than 100 public companies, while others will be inspected every three years.

The board, which will end the accounting industry's much criticized peer-review process, will also set accounting and ethics standards for the industry.

The board plans to meet again on Dec. 2. In the intervening weeks, the members expect to hold some conference calls.

Board members said they expect to hold their first formal meeting in early January. The SEC is currently wrapping up its background check of the members, who are also unwinding their present professional responsibilities.

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